Mart Wolbert: Uranium Prices, Supply, Demand — What's Next as Mindset Shifts
Summary
Market Outlook: The uranium market is experiencing a significant mindset shift, with increased interest from utilities, generalist funds, and companies related to the nuclear industry, indicating a broader acceptance of nuclear energy's future role.
Supply and Demand Dynamics: There is a pressing need for increased uranium supply to meet both current and growing demand, with major producers like Cameco and Kazatomprom reducing output, leading to a tight supply-demand balance.
Utilities' Strategy: Utilities are beginning to adopt a longer-term vision for securing nuclear fuel, driven by geopolitical concerns and the need for reliable energy, which may lead to increased contracting and inventory restocking.
Price Expectations: Uranium prices are expected to rise, potentially reaching triple digits by the end of 2026, as the market navigates through supply constraints and increased demand from utilities and financial players.
Investment Strategy: Investors are advised to focus on quality uranium stocks, using a pyramid approach to balance risk, with a strong base in established companies and selective exposure to exploration plays for potential high returns.
Broader Market Opportunities: Beyond uranium, there are opportunities in gold, silver, copper, and US industrials, driven by macroeconomic trends such as reindustrialization and shifts in global monetary systems.
Transcript
[Music] I'm Charlotte Mloud with investingnews.com and here today with me is Mark Wahberg. He is analyst at Contrarian Codeex or you may know him on X as Yellow Bull 11. Thank you so much for being here. Great to have you as always. >> Thank you for having me. I'm glad that I can finally do some interviews again and what better place to start than here. >> Amazing. Really good to have you back. Glad to hear you're back interviewing again. And we've got a lot to go over. There's very much going on in the uranium space right now. And where I thought we could begin is you're just back from the WNA event. So I'm hoping that you can run through some of your key takeaways there and maybe give a sense of the mood on the show floor. >> It was um for all intents and purposes the best event that I've attended so far for the WNA. And that is saying something because the previous years were also very very great events and I applaud the WNA organization for getting these things on the way because it is it's not an easy task to get so many hundreds of people uh to really like get the most out of this event but they certainly they certainly outdid themselves and at the event itself it is always a an absolute pleasure to attend because it gives me the chance to talk directly to my contacts to to establish these new contacts, meet new people and that's what makes these events so so useful as a networking opportunity and of course also as an opportunity to get um the best uh and the most relevant information. So for example, every two years they share the nuclear fuel report. The last time was back in 2023 and now the nuclear fuel report that was shared once again was very very interesting. The panel in which during which they showed it uh made for some very interesting comments. And I could go on and on about everything I did at the at the conference. And if I did, we'd probably be sitting here for at least another two days, but basically how I would uh summarize everything was that this conference was one of a mindset shift. Now, what do I mean by that is that over the previous years, you always had of course some of the capital groups, some of the producers that were bullish uranium, right? That you've heard the story, you know, the thesis and people were enthusiastic. We're like, "Okay, this this thing is going to go." And of course, like what we've seen over the past 5 years, we've seen a consistent uptrend for the term price. You see it go up, then pause for 12 to 15 months, then go up again, then pause again. But the relative uh uptrend or sorry, the relative trajectory has always been of an uptrend. Um, but one thing that is different now is that it felt like there was more of a complete mindset shift uh across the sector, if that makes sense. So that this time that doesn't just include some bullish analysts, a few uranium focused hedge funds and some producers but also uh utilities also other uh companies related to the nuclear power industry also some other analysts that I had not seen before and some more generalist funds that are now becoming interested in uranium especially those that have just made a big profit on uh SMR and nuclear related uh equities. that of course went up a lot over the past few years. So basically what we're seeing now is we see them becoming interested and it really feels like the theme that kind of ran through the conference is one of we we're going to need more supply. If you want to feel this nuclear renaissance, we're going to need more supply. And that made for some very interesting conversation because as that mindset shifts, people will start looking for the facts and the numbers that kind of back up that mindset shift. if that makes sense. But that's something that we will undoubtedly get into in this interview as well. But overall, great conference, lots of good information. I managed to write I was just there for two and a half days and I managed to write a piece on seven regard no even 18 pages. Uh so packed full of information and it was uh it was great. Could have been 15 pages but I don't think anybody's going to read 15 pages. So I had to distill it um into all the the most important information and there was a lot of it. >> Well, thank you for going into that. I always love to hear about the event from you. You always speak very highly of it. One year I'm going to make it over there at some point. So let's get into it a little more deeply. I want to go into supply as you're speaking about. So you had a great post on X. It was a a quote I believe from the conference talking about supply and it's essentially saying we're going to need more supply to meet current demand not even accounting for the growing demand. Meanwhile though we have major producers like chemical Adamrom saying that they're going to be producing less uranium. So can we take a look at the supply demand balance and and the tightness there? >> Yeah that that quote came directly from the panel. Um, and it was it you could almost like hear the kind of the gasp in the room. There wasn't like an audible gasp, but you could just see some people react to it. Uh, which I thought was very very interesting because it really shows that you're looking at nuclear and getting the the reference scenario and the upside scenario, you're looking at I don't have the exact numbers with you. I believe it is 4.6% 6% uh going all the way up to something to 6 to 7% um caggr uh in terms of growth over the coming decades. And that sort of growth going from a decade ago it being a dying industry and nobody will ever use nuclear again yada yada you've you've heard all before to now being a real established growth industry which will need growing supply as well. But we've just seen supply just just lag. If you would have asked me 5 years ago, okay, Mark, uh, in 2025, you're going to go to this conference, the term price is going to be 80 $82. Spot is going to be in the mid70s. How much supply uh, do you think is going to be online? And my answer would be a hell of a lot more than is online right now. And this just really hits home the fact that uranium mining is hard. I'm sure everybody listening to this has heard this mantra a million times before but it's repeated so often because it's true. So what we're seeing is we are seeing tens upon tens upon tens of millions of pounds uh in deficit cumulative and growing into the 2030s and it is getting extremely tight out there. So, what we're seeing is that we're seeing uh European utilities, which historically have been better covered than their US counterparts, at 75% coverage by 2027. In the US, we're looking at 55% coverage by 2029, falling off an absolute cliff into the 2030s. And these two, the EU and the US, they are responsible for roughly half of the global nuclear power capacity. So what you're seeing if you look at that cumulative uncontracted supply you're looking at according to UXC estimates £400 million that will need to be contracted between now and 2030. If you're looking at 2040 you're looking at 2 billion pounds that still need to be contracted. So for those listening right now and saying, "Okay, Art, it's all nice and well." But if we're looking at this coverage into 2029, 2030, 2031, why is that relevant? We're in 2025 right now. It's relevant because the way that the nuclear and uranium industry works is that these contracts are signed for long periods of time. You need to take into account a two to three plus year fuel cycle. And what that means is that these utilities need to start covering right now for the 2028 2029 time frame and next year 2029 to 2030 and those contracts then run into I've seen several RFPs going into the market between 2029 and 2033. I have seen I've even seen some contracts going out into the late 2030s. That is a period of time that needs to be taken into account in the mindset and in strategy of those fuel buyers right now. and not in 2034 and then you're starting the contract for 2035. So I think that is very very important to keep in mind and what we're seeing right now is that lots of producers especially the bigger producers with chemical being the prime example they are seeing the writing on the wall. They are basically saying to utilities we are running into massive supply demand cap. We have the best pounds in the industry. You can get these pounds but only on our terms. This is sellers market now. You've had your fun. Um, we want floors in the high70s. We want ceilings of $140 plus. We want strong terms that reflect the fact that we are running into a massive supply demand deficit that even if we bring on all these prospective minds, all these restarts suddenly magically go on time and on budget and we both know that it's not going to happen. But let's say it happens, okay? the magic of the WNA does crazy things and all these projects just go just go online on time and on budget. Well, we are still left with deficit which means we need new green field which means we need higher prices for longer because development projects that was something that was noted on stage as well previously in their modeling for development projects. They were taking into account roughly 8 to 15 years of development timelines that is now growing to 10 to 20 years. So 8 to 15 to 10 to 20 is a massive shift and something that needs to be taken into account. Of course higher prices will incentivize new production. That's always how it works and we will always find new supply because uranium contrary to popular belief is not that hard to find. There are lots of resource out there, but you need the right price. You need enough time to develop the projects at that higher price. And then you need enough intellectual capital that actually knows how to build and subsequently operate a uranium mine. And I think we get higher prices. I think we get higher price for longer. But that intellectual capital part of the equation that is very very difficult to come by because a lot of the people that were around that actually in order to build and operate these mines they either retired they went to different industries during the bare market or they're dead. So it's basically one of the three and there were only a few very good management teams left. Still, I think supply will respond at a high enough price, but again, we need a higher price to really have any chance of filling that gap. And I believe it was the IA that noted that if you want to have any chance to filling that gap, money needs to be poured into into the ground yesterday. >> Okay, really good overview. And I've got a number of ways that I want to follow up here. First, I'm curious about the utilities. I know this is one of the most opaque parts of the market, but I'm wondering if you can say anything about how they are reacting right now to these circumstances cuz I feel like throughout this year, one of the the themes I've been hearing from other experts is they just haven't been contracting as much as they should be compared to even last year. >> Absolutely. Like contracting year to date has been absolute pittance. I believe we're at 43.5 million pounds being contracted on a year-to-day basis over 47 different transactions. That is for all intents and purposes. Uh pretty pitiful. So, um a lot of people are constantly wondering, okay, what are utilities thinking? And it's true, like they're not super open. They're not openly doing interviews. They're not they're not writing reports to share with the people. Like, they're just doing their jobs. And at the conference, I've had the pleasure to talk to not one but three different fuel buyers. Two from the largest two US utilities or amongst the largest US utilities. I shall refrain from naming any names uh at this time but these are very significant fuel buyers and fuel managers and a third fuel buyer um that also has a view on the market. Let's start with the first two. And what is very interesting that these two fuel buyers who have done a great job preparing their respective utilities for preparing for the supply demand gap that is coming they are very well covered but they are looking at this market and saying okay I think the utilities that are less well covered your your marginal buyers and those marginal buyers will end up pushing the price a lot higher those utilities that are not yet very well covered they are they it felt like they were worried for them. One of the fuel buyers um gave me a quote which was basically when I spoke to him and was saying, "Okay, well your utility is covered until X year, right?" And he's like, "That's true, but supply on paper or sorry, um yeah, supply on paper doesn't equate supply into the reactor core." And basically what he meant by that, it's all nice and walled. You have all these pounds on your balance sheet from developers and producers that may or may not deliver on their promises over the coming 5 6 7 10 years. But if you try to put that piece of paper into a reactor core, that nuclear power plant is not going to run. Like you need the physical uranium to go through the full cycle to eventually get the fuel pallets to run your uh to run your reactor. Um what one of the fuel managers also noted to me is that I at the start I kind of noted that mind shift change right what he noted is that the US utilities have always been um more shortterm focused like okay there's enough secondary supply there is plenty of primary supply that can be contracted we can be a little bit more short shorttermish but right now with so much public uh political and monetary support basically what you're seeing is that these utilities especially those well-informed and and they are aware of supply uh of us running into supply demand deficit contrary to popular belief. So what we're seeing is these utilities are now taking a longerterm vision knowing that their power that their nuclear power will be trading at a premium will be in high demand. These power prices that there is that they're seeing are more than enough so they can make money hand over fist. these utility stocks have done exceptionally well and they're now taking that longerterm vision is what he told me to prepare for a nuclearpowered future. How I translated that was that they will then come into the market to make sure that they secure that nuclear power future via longerterm contracts and also I believe that we will see some form of inventory restocking as well because given global geopolitical turmoil and relatively fragile supply chains, you wouldn't want your multi-billion dollar piece of critical energy infrastructure to have any risk of being there and not providing a 92 and 12% capacity factor. You just don't want that. So they're taking that longerterm view and I thought that was very very interesting. And I also think that one uh the one thing that should be noted is that people are often very focused on okay we need all these fuel buyers to step in because we need replacement rate of contacting right we need 100 to we need 180 to 190 million pounds of contracting happening each and every single year otherwise no bull market that take I don't think is very well informed because there's only finite amount of pounds that can be contracted each year and given that we're running into a massive deficit the the price sensibility of term contracting is going to be u far below the replacement contracting. What I mean by that in plain English is that we are very likely to see price move up substantially on even£100 million or £120 million being contracted on an annual basis. I think that if we get to 100 million pounds, I think we will see the turn price continue to to tick up as it goes. And I've spoken to a few of these obviously spoke to these fuel buyers but also a few producers and fiscal market contexts and basically noted that once we get to the through this 8090 level per pound, uh that's when things get really interesting. That's when the possibility becomes there to hit like an air pocket where those marginal buyers will be chasing the price up. But we first need to get through this $80 to $90 level. How long is that going to take? 6 months maybe, maybe longer, maybe shorter depending on prevailing circumstances in the term market, but it is absolutely going to be interesting. And so which utilities are going to be there and which marginal buyers are going to be there? Well, I spoke to the third fuel buyer because I mentioned two who were very wellprepared and I applaud them for that vision. And I want to say this, these fuel buyers, they are smart, but it's not there is often more often than not not necessarily their job to time the market or to get the best price in the market or to watch the market each and every single day like a lot of these analysts do, especially at smaller utilities. And one of these fuel buyers basically said, "I don't see any reason why I would be paying more than $60 per pound for my supply going forward." At the moment I heard that, I just had to kind of just I was drinking water at the time. I kind of had to keep it in because I just I was just surprised by him saying that. And I believe that uh these are fuel buyers or actually these are the utilities that will be the marginal buyers going forward because I can guarantee you one thing price will be at triple digits before it will get to $60 per pound again on the term pricing. >> Very very interesting to get that perspective and I applaud you for keeping your composure during that conversation. I think a little bit more on on supply. So you mentioned also mining is hard. We all know that and arguably even harder to bring a new deposit into production. But we are seeing efforts in the US elsewhere around the world to speed up permitting just streamline processes a bit. So I'm wondering when you see this happening, how impactful do you think that will ultimately end up being? >> I think in the US in particular, I think it will have an impact. I don't think it will have a massive impact because the US needs approximately 50 million pounds a year in terms of natural uranium demand. And what did we produce it? I think 3 years ago we produced £200,000. The next year 2023 we produced 50 and then last year we produced £680,000. Putting it all together over the past few years, the US has had an annual consumption profile on paper of 150 billion pounds and they produce a grand total of 930,000. That is complete reliance on uranium imports and I think that will change. I think we will see the US ramp up to 510 million pounds getting a few projects online. We've seen a lot of support for it. Do I think they will get anywhere closer to the 43.7 billion pounds in mind at the peak in 1980? Absolutely no way. No way. But I do think there will be more support. I don't think there will be more support in Canada, in Australia, and several other countries to see them get more uranium out of the ground because again, we're going to need a supply response. We're going to need a lot more uranium and we're going to need every pound we can get their we can get our hands on. >> Good to go into that as well. And I'm wondering, so when we're looking at supply, I think we've talked about this before because it's it's something that I think about from time to time. Is there any chance that bottlenecks in the future could dampen enthusiasm around uranium or or nuclear power? How how do you see that? >> I deem that chance as uh very low. Um basically because the cost of running a nuclear power plant if you look at the cost of electricity uh natural uranium is at around I believe 10 to 15% of the total cost that might actually be the complete fuel package not just natural uranium which would be then lower maybe 7 or 8%. Um, with that low of an operating cost, the uranium price would need to go to I heard one figure being quoted as $650 per pound before like it will have like such a big impact on cost of electricity that they will just cause problems. I don't think we get anywhere close to that like anywhere anywhere close to that. So I don't think it will have a major impact on on the uh cost of electricity and the the the procurement profile for utilities if you want to call it that especially if you compare it to something like coal and gas right for coal it's the price of the commodity itself is 40 to 70% of the operating cost for natural gas it can be as high as 80%. So when you look at this, I think that there will be no problems in the procurement of supply because the price will rise as much as it needs to to get enough supply online to meet all this demand because if with all the demand that we're getting and all the positive uh catalyst that we're seeing for nuclear power, they're not going to be allowed to shut down these nuclear power plants. and we're going to see new builds continue to go up as we continue to see accelerating support around the world. So I think the price will rise to make sure we get that demand. I will think we will see that time frame to get that demand and especially um I think a good example of this uh are the hyperscalers. So your Microsofts, your Amazons, your Googles like Microsoft was at the conference. I've heard rumors that they have signed up to the WNA and that Amazon and Microsoft signed up for UX weekly. Um, I don't know if that's actually true, but the fact that this is being discussed, the fact that Microsoft was actually there as part of the WNA, I think says a lot. And I've also heard that these uh these uh hyperscalers, if you want to call them that, these tech giants, they want reliable green 92 and a half% capacity factor nuclear power to power their ever growing data centers and cloud computing stoages and they will not allow for any sort of supply demand imbalance to to stop them getting that power. So what am I hearing is that some of these hyperscalers may enter into the fuel cycle itself to then start procuring pounds. Will we see that? I don't know. But I think the chance is there for them to step into the market for contracts from what I've heard. Instead of that those 8 to 12 years you might normally see over longerterm contracts, 15 to 20 years is something that I've heard being quoted. Again, this is all speculation at this point, but given the folks that they have on nuclear power and given that Microsoft had a nuclear power division was actually at the conference, they are clearly taking a massive interest and that includes the procurement of fuel as well. So basically very long answer but to answer your question in a more concise matter uh no I don't think that price nor timelines nor the supply demand gap will actually stop this nuclear renaissance from continuing continuing to get attraction. >> Very very reassuring. So glad we went into that as well. And I think we've taken a decent look at the supply side but are there any demand side considerations that you would pull out right now? I feel like every time I hear something about demand, it's about how how positive it is and there's there's certainly a lot going on. >> Absolutely. I think for the demand side, I think it's very very good. There were a few downward revisions for like the demand right now. Uh one of the reasons was for uh slightly slower than expected Japanese restarts. Uh some impact from South Korea. Uh the subaricia nuclear power at the large in the entirety of Europe being offline. That all has a negative impact on demand right at this moment. But going forward, it is all right till positive demand risk because right now there is nothing like we're pricing in China of course being a becoming a massive consumer. India be being a growth market for nuclear power. A few nuclear power plants being built here and there mainly in Asia but also some in Europe. What it is not pricing in is a possibility of a major western nuclear buildup program which would be as I called it the catalyst to end all catalyst and is also not necessarily pricing in all these restarts and life extensions but we've seen what I don't think is also or what I don't think is either being priced then especially in the fuel report itself again excellent job W&A with the fuel report but what you're seeing is that if you start accounting for inventory restocking with just discussed that that shifting in US utility mindset to perhaps a longerterm vision rather than a short-term vision. What you're seeing is that they're holding one and a half years to two years worth of inventory. They've always done so and they will continue to do so to make sure that they can adequately get from one refueling to another and not having to worry about okay we have to get everything that we have to get this through the fuel cycle. It's two plus years we don't have any inventory. That will never happen. they will always have inventory because that's just mandated. So basically what you're seeing is that I think for this longerterm vision we could see inventory restocking and them saying maybe we should go for three years maybe we should go for more maybe we should take a leaf out of Japanese utility playbook go for five plus years will that happen I'm not modeling for that but I am definitely seeing that possibility being open more and more I want to say stay conservative in my modeling and model two years worth of inventory when they go ahead and restock but if we see more than that I think we'll have a monumental impact. I also think we might see more strategic reserves. I wouldn't at all be surprised to see the US government go and do the same thing that the Chinese government has done and say, "Okay, we need a strategic reserve because nuclear power is 20% of our grid. It is a absolutely pivotal part of our energy infrastructure. We do not want to be dependent on a foreign nation supplying us to make sure that we can keep the lights on. So as we already established, the US cannot be self-sufficient when it comes to the the supply of natural uranium. So what do you want? You want to build a strategic reserve to make sure that you have a shock absorber in case you need it. So I think strategic reserve building is something we need to take into account. Lastly, financial demand. We've already seen sput have a absolutely massive impact. We've seen uh some other smaller financial players have an impact on the market. I think that we will see financial demand come in more and I think that the moment they enter in uh on mass uh in a more profound way than we've already seen I think is above $90. Once you get through the supply that is still available between 80 and 90 and you get closer to that potential air pocket scenario, I think that is where it gets very very interesting and that's where you get more financial interest in the sector and I think uh depending on the amount of financial interest I think that will have a monumental impact >> right and price was exactly the direction I was going to go in next. So you've talked a little bit about what's going on there. anything further you would say about price expectations in 2025 and beyond. I know you've told us in the past to pay attention to the tour market because that's the reality here, but probably worth talking about the spot market as well. >> Yeah, of course the tour market is the most important market, but I'm not going to sit here and deny that the spot market is not the market that's being watched by most investors and often dictates price movements as well. Uh we already talked about year-to- date term volume demand in case or in the in the instance of spot market demand. We're looking at around 32.5 million bars being contracted over 262 separate transactions on a year-to-ate basis. Um it's not it's it's not huge amount of volume, but it is volume. And I think that we um I think that price will continue to move up steadily. Again, we need to get through this this supply that is available for term contracting between that $80 and $90 level. Um, when do I think we'll reach that $90 level? Could be by the end of the year if a lot of demand comes in. Um, could also be in 6 months, but I believe that over a longerterm time frame. So looking at the end of 2026. So um I think at the end of 2026 I think we are in triple digit uh uranium pricing levels for both spot and term. How high in triple digits? Again that depends on prevailing circumstances. I follow this market each and every single day and I will adapt accordingly but we have higher to go. >> And I think this is a fun question at least for me. So you have your stadium model to essentially tell us where are we in the cycle. So, where would you situate uranium right now at this moment? >> I would say that the um the the brutal correction that we've had, I would I would call that the halftime show. It wasn't much of a show. It was more of halftime torture, but it um it was certainly uh it was certainly a halftime pulse. So, what we're seeing right now is I think we are just about seeing that second half or we we are seeing the second half get on the way. We're seeing more and more people get excited, more and more people slowly and surely entering the stadium. And I think that the second half is going to be the most interesting. And I think that will play out over the coming 1 to 3 years. Again, depending on how this market goes, if we see a spike or if we see a stairst step approach to the upside, I hope we see a stairst step approach. Um, and I think the second half will be the most exciting half. And again, uh to remind people that are maybe not familiar with my stadium model, uh you might want to get out before we go into extra time because even though that is usually the most exciting and as a very good friend and very smart analyst said as well, the thesis will be most compelling at the top. Um you don't want to be there once everything gets so excited and then the game just ends and everybody tries to leave the stadium at once and you're just stuck at the doors. So, um I will keep a close eye on that because again I follow this market every single day. I pour hours and hours and hours of my time into it and my conclusion is we will see a very exciting second half. It remains to be seen how long that will last. Um but yeah, we this game is not over yet. >> Great great context there. And if we look over to the company side, you had posted on X, I believe at the end of August, that the Contrarian Codex portfolio achieved its first 10 baggers. So congratulations on that. And it was the in the form of energy fuels call options. So I thought it would be good to go into that maybe explain the process there and what happened for for those who might not understand or or who want to learn more about the process that you went through there. Now, call options are of course inherently risky for those who are familiar with it. And the remaining call options that we had, we've of course sold a lot on the way up. Like I'm not going to pretend that I'm going to time the top perfectly. But but the remaining copies that we still have in the portfolio are up, I believe today, 1175% in 4 months. Uh which is of course an absolutely insane return that I'm very very happy with. I'm very very happy and that the uh that the codeex community has done very well on those. Um we bought some chemical call options as well. Those went up around 310%. And this is kind of a playbook that I try to repeat when we get like these extremes. So for example, in April and May, I would say we got an extreme low in sentiment. And sentiment is something that I track every single uh newsletter. I upload those every two weeks. And when we track sentiment data from a score from 1 to 100, when sentiment gets extremely low and we get close to a turn and I can uh of course nobody can spot the term or the turn perfectly. But knowing this market inside and outside, it helps when you combine that fundamental analysis with that sentiment analysis to then capture these turns. So those calls have done exceptionally well. Last year the market bottomed at the final day of the WNA. We also bought call options. They also went up 300 plus%. So it can definitely be super profitable. Again, it can be risky. But for energy fuels in particular, my reasoning behind this was not just uranium, but also for those who don't know, I extensively cover in those bi-weekly newsletters also macro analysis. Having a macro playbook I think is very important because it affects all your investments no matter how strong the thesis is. And one of the parts of my macro thesis was that I thought that the negotiations between Russia and China would come down to a few things. And one of those key things would be the export from China of rare earth elements of which they control 90 to 95% of the market. Those rare earth elements are absolutely essential to the US industrial base, especially the US military complex. And those export restrictions that they briefly put on those and those threatening of, oh, then we're just not going to export to you anymore, I thought would really fuel the need and the narrative surrounding a um the need for a domestically secure rare earth element fuel cycle. And White Mesa Mill, which is owned by Energy Fuels, they were busy uh building a separation circuit for those rare earth elements. So they were in prime position to cash in on that narrative. Of course, we're not seeing any government support like yet like we've seen with MP materials, but the narrative itself was enough to drive up the stock. So my analysis there was okay, we're going to see more support for domestic rare element uh production. Energy fuel is going to be one of the main uh main components of that narrative. I think they will do well. they went they ended up doing exceptionally well. They had a few great catalysts over the past week and I think they will continue to deliver. But yeah, that's that was kind of my reasoning and I hope to be able to repeat those uh those call options and those equity positions um when we see the next uh tradable opportunity. >> That gives a really good idea of your strategy there. So looking at your approach to uranium stocks right now, is there anything more about that you can say about how you're focusing? >> Uh I think right now I think it's important to focus on quality like you can go for your small cap exploration place hope they hit the next error deposits and then you can 150x your money. Like that's a dream, right? And that's what everyone wants. And I still think that there is there is some argument to be had to have that exposure. What I would say though, and this I' I think I've noted this in every single interview I've ever done, but it's still relevant, and that is basically um a py pyramid approach. So, you want to build your uranium portfolio to capture the upside that I expect over the coming few years. How do you do that? You build the base of the pyramid, the largest part of the pyramid, um with the highest quality stocks, your camel co, your denense, your nexents, your spots, your sprouts. Um so you have a strong base to capture upside and then as you go up the pyramid you lessen your exposure but you can go up with regards to risks. So basically at the top of the pyramid you might have you might hold one or two smaller positions than some explorers. So you get that torque but your entire portfolio is underpinned by quality names that will still give you exposure even if that explorer doesn't hit and doesn't give you that leverage. I see some people uh building the pyramid upside down, but physics and the market will probably not allow for great returns if you try to do that. So, I try to build myself my pyramid um the way it was intended to by the Egyptians. >> Makes makes a lot of sense. And I think we've done a pretty good job of covering uranium. But before I let you go, as you're mentioning at Contrarian Codeex, you have a much broader view on you've got a macro view, you're looking at other commodities. So before I let you go, I was wondering if you can highlight any other areas where you're seeing opportunity right now. >> I would say right now I think there is a I think macro is right now more important than ever to follow because again it does affect all the investments that we hold. Uh I think it's good to have a good micro macro vision. Um gold and silver even though they have run exceptionally hard and they have been the the carrier even though uranium has done so well and the college hasn't done well gold and silver have been the carrier in the uranium or in sorry in the gold silver portfolio and that's where we recently got another 10 backer for one of our holdings adding precious metals so that was also great to see uh but even though those have done exceptionally well and even though uh we have a an outsized exposure to it I still think that there is more upside left for especially gold. Silver is gold's uh volatile little cousin if you want to call it that. And uh it will go it will go up a lot, it will go down a lot, it will be volatile. But gold itself is um to kind of tie it into my my macro road map is what we have seen over the past two years. We've seen two three years actually. We've seen gold slowly but surely come back into the fold as a neutral reserve asset of sorts and we're seeing it slowly but surely start to take market share uh from US treasuries as that uh global neutral reserve asset and I think this is a trend that will just continue to take place and that will keep pushing gold higher and higher and higher until the broad market finally realizes that oh oh yeah this gold this rally speculative. Oh, it's because of all the geopolitical turmoil. Sure, there's a little bit of that. There's always a little bit of that. But overall, I would say that this rally is underpinned by a real fundamental move in the global monetary system that I don't think is anywhere near over. So, I think that there is still opportunity there. Uh, I really like copper. Um, we've done well on US cannabis, but also very volatile. Tin is also very interesting and beyond that I I really really like and that is some of my highest conviction stocks today US industrials and that's not just uh US industrials just in one particular bracket it's it's more broad than that and I think that several US industrials are are very very interesting right now once you get into that theme of US reindustrialization and reshoring and yeah we have a few of those in the portfolio and I think those will do uh will do very very well. >> Good to go into that as well. And very final thing, where can everybody find you if they want to learn more and read all of your research? >> Oh, people can find me at yellow1 on Twitter. They can go to patreon.com/contringcodex for bi-weekly newsletters, company analysis, uh frequent updates either on macro or uranium or anything other that affects the portfolio. Um and for interviews as well. I also run a a discord community uh where a lot of great ideas are shared and I am very thankful to have such a great community and there are so many super smart members part of it that just share their own insights and it's just it just makes for a great way to navigate the market. So, uh I hope to see people there. >> Well, very good. Well, we'll have links in the video description for people if they want to learn more. Thank you so much for coming back to talk about what's going on in the markets. This was very valuable for me as always. >> Thank you for having me, Charlotte, and I hope the listeners enjoy it. >> Of course, and once again, I'm Charlotte Mloud with investingnews.com and this is Mark Walbert with Contrarian Codeex. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]
Mart Wolbert: Uranium Prices, Supply, Demand — What's Next as Mindset Shifts
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[Music] I'm Charlotte Mloud with investingnews.com and here today with me is Mark Wahberg. He is analyst at Contrarian Codeex or you may know him on X as Yellow Bull 11. Thank you so much for being here. Great to have you as always. >> Thank you for having me. I'm glad that I can finally do some interviews again and what better place to start than here. >> Amazing. Really good to have you back. Glad to hear you're back interviewing again. And we've got a lot to go over. There's very much going on in the uranium space right now. And where I thought we could begin is you're just back from the WNA event. So I'm hoping that you can run through some of your key takeaways there and maybe give a sense of the mood on the show floor. >> It was um for all intents and purposes the best event that I've attended so far for the WNA. And that is saying something because the previous years were also very very great events and I applaud the WNA organization for getting these things on the way because it is it's not an easy task to get so many hundreds of people uh to really like get the most out of this event but they certainly they certainly outdid themselves and at the event itself it is always a an absolute pleasure to attend because it gives me the chance to talk directly to my contacts to to establish these new contacts, meet new people and that's what makes these events so so useful as a networking opportunity and of course also as an opportunity to get um the best uh and the most relevant information. So for example, every two years they share the nuclear fuel report. The last time was back in 2023 and now the nuclear fuel report that was shared once again was very very interesting. The panel in which during which they showed it uh made for some very interesting comments. And I could go on and on about everything I did at the at the conference. And if I did, we'd probably be sitting here for at least another two days, but basically how I would uh summarize everything was that this conference was one of a mindset shift. Now, what do I mean by that is that over the previous years, you always had of course some of the capital groups, some of the producers that were bullish uranium, right? That you've heard the story, you know, the thesis and people were enthusiastic. We're like, "Okay, this this thing is going to go." And of course, like what we've seen over the past 5 years, we've seen a consistent uptrend for the term price. You see it go up, then pause for 12 to 15 months, then go up again, then pause again. But the relative uh uptrend or sorry, the relative trajectory has always been of an uptrend. Um, but one thing that is different now is that it felt like there was more of a complete mindset shift uh across the sector, if that makes sense. So that this time that doesn't just include some bullish analysts, a few uranium focused hedge funds and some producers but also uh utilities also other uh companies related to the nuclear power industry also some other analysts that I had not seen before and some more generalist funds that are now becoming interested in uranium especially those that have just made a big profit on uh SMR and nuclear related uh equities. that of course went up a lot over the past few years. So basically what we're seeing now is we see them becoming interested and it really feels like the theme that kind of ran through the conference is one of we we're going to need more supply. If you want to feel this nuclear renaissance, we're going to need more supply. And that made for some very interesting conversation because as that mindset shifts, people will start looking for the facts and the numbers that kind of back up that mindset shift. if that makes sense. But that's something that we will undoubtedly get into in this interview as well. But overall, great conference, lots of good information. I managed to write I was just there for two and a half days and I managed to write a piece on seven regard no even 18 pages. Uh so packed full of information and it was uh it was great. Could have been 15 pages but I don't think anybody's going to read 15 pages. So I had to distill it um into all the the most important information and there was a lot of it. >> Well, thank you for going into that. I always love to hear about the event from you. You always speak very highly of it. One year I'm going to make it over there at some point. So let's get into it a little more deeply. I want to go into supply as you're speaking about. So you had a great post on X. It was a a quote I believe from the conference talking about supply and it's essentially saying we're going to need more supply to meet current demand not even accounting for the growing demand. Meanwhile though we have major producers like chemical Adamrom saying that they're going to be producing less uranium. So can we take a look at the supply demand balance and and the tightness there? >> Yeah that that quote came directly from the panel. Um, and it was it you could almost like hear the kind of the gasp in the room. There wasn't like an audible gasp, but you could just see some people react to it. Uh, which I thought was very very interesting because it really shows that you're looking at nuclear and getting the the reference scenario and the upside scenario, you're looking at I don't have the exact numbers with you. I believe it is 4.6% 6% uh going all the way up to something to 6 to 7% um caggr uh in terms of growth over the coming decades. And that sort of growth going from a decade ago it being a dying industry and nobody will ever use nuclear again yada yada you've you've heard all before to now being a real established growth industry which will need growing supply as well. But we've just seen supply just just lag. If you would have asked me 5 years ago, okay, Mark, uh, in 2025, you're going to go to this conference, the term price is going to be 80 $82. Spot is going to be in the mid70s. How much supply uh, do you think is going to be online? And my answer would be a hell of a lot more than is online right now. And this just really hits home the fact that uranium mining is hard. I'm sure everybody listening to this has heard this mantra a million times before but it's repeated so often because it's true. So what we're seeing is we are seeing tens upon tens upon tens of millions of pounds uh in deficit cumulative and growing into the 2030s and it is getting extremely tight out there. So, what we're seeing is that we're seeing uh European utilities, which historically have been better covered than their US counterparts, at 75% coverage by 2027. In the US, we're looking at 55% coverage by 2029, falling off an absolute cliff into the 2030s. And these two, the EU and the US, they are responsible for roughly half of the global nuclear power capacity. So what you're seeing if you look at that cumulative uncontracted supply you're looking at according to UXC estimates £400 million that will need to be contracted between now and 2030. If you're looking at 2040 you're looking at 2 billion pounds that still need to be contracted. So for those listening right now and saying, "Okay, Art, it's all nice and well." But if we're looking at this coverage into 2029, 2030, 2031, why is that relevant? We're in 2025 right now. It's relevant because the way that the nuclear and uranium industry works is that these contracts are signed for long periods of time. You need to take into account a two to three plus year fuel cycle. And what that means is that these utilities need to start covering right now for the 2028 2029 time frame and next year 2029 to 2030 and those contracts then run into I've seen several RFPs going into the market between 2029 and 2033. I have seen I've even seen some contracts going out into the late 2030s. That is a period of time that needs to be taken into account in the mindset and in strategy of those fuel buyers right now. and not in 2034 and then you're starting the contract for 2035. So I think that is very very important to keep in mind and what we're seeing right now is that lots of producers especially the bigger producers with chemical being the prime example they are seeing the writing on the wall. They are basically saying to utilities we are running into massive supply demand cap. We have the best pounds in the industry. You can get these pounds but only on our terms. This is sellers market now. You've had your fun. Um, we want floors in the high70s. We want ceilings of $140 plus. We want strong terms that reflect the fact that we are running into a massive supply demand deficit that even if we bring on all these prospective minds, all these restarts suddenly magically go on time and on budget and we both know that it's not going to happen. But let's say it happens, okay? the magic of the WNA does crazy things and all these projects just go just go online on time and on budget. Well, we are still left with deficit which means we need new green field which means we need higher prices for longer because development projects that was something that was noted on stage as well previously in their modeling for development projects. They were taking into account roughly 8 to 15 years of development timelines that is now growing to 10 to 20 years. So 8 to 15 to 10 to 20 is a massive shift and something that needs to be taken into account. Of course higher prices will incentivize new production. That's always how it works and we will always find new supply because uranium contrary to popular belief is not that hard to find. There are lots of resource out there, but you need the right price. You need enough time to develop the projects at that higher price. And then you need enough intellectual capital that actually knows how to build and subsequently operate a uranium mine. And I think we get higher prices. I think we get higher price for longer. But that intellectual capital part of the equation that is very very difficult to come by because a lot of the people that were around that actually in order to build and operate these mines they either retired they went to different industries during the bare market or they're dead. So it's basically one of the three and there were only a few very good management teams left. Still, I think supply will respond at a high enough price, but again, we need a higher price to really have any chance of filling that gap. And I believe it was the IA that noted that if you want to have any chance to filling that gap, money needs to be poured into into the ground yesterday. >> Okay, really good overview. And I've got a number of ways that I want to follow up here. First, I'm curious about the utilities. I know this is one of the most opaque parts of the market, but I'm wondering if you can say anything about how they are reacting right now to these circumstances cuz I feel like throughout this year, one of the the themes I've been hearing from other experts is they just haven't been contracting as much as they should be compared to even last year. >> Absolutely. Like contracting year to date has been absolute pittance. I believe we're at 43.5 million pounds being contracted on a year-to-day basis over 47 different transactions. That is for all intents and purposes. Uh pretty pitiful. So, um a lot of people are constantly wondering, okay, what are utilities thinking? And it's true, like they're not super open. They're not openly doing interviews. They're not they're not writing reports to share with the people. Like, they're just doing their jobs. And at the conference, I've had the pleasure to talk to not one but three different fuel buyers. Two from the largest two US utilities or amongst the largest US utilities. I shall refrain from naming any names uh at this time but these are very significant fuel buyers and fuel managers and a third fuel buyer um that also has a view on the market. Let's start with the first two. And what is very interesting that these two fuel buyers who have done a great job preparing their respective utilities for preparing for the supply demand gap that is coming they are very well covered but they are looking at this market and saying okay I think the utilities that are less well covered your your marginal buyers and those marginal buyers will end up pushing the price a lot higher those utilities that are not yet very well covered they are they it felt like they were worried for them. One of the fuel buyers um gave me a quote which was basically when I spoke to him and was saying, "Okay, well your utility is covered until X year, right?" And he's like, "That's true, but supply on paper or sorry, um yeah, supply on paper doesn't equate supply into the reactor core." And basically what he meant by that, it's all nice and walled. You have all these pounds on your balance sheet from developers and producers that may or may not deliver on their promises over the coming 5 6 7 10 years. But if you try to put that piece of paper into a reactor core, that nuclear power plant is not going to run. Like you need the physical uranium to go through the full cycle to eventually get the fuel pallets to run your uh to run your reactor. Um what one of the fuel managers also noted to me is that I at the start I kind of noted that mind shift change right what he noted is that the US utilities have always been um more shortterm focused like okay there's enough secondary supply there is plenty of primary supply that can be contracted we can be a little bit more short shorttermish but right now with so much public uh political and monetary support basically what you're seeing is that these utilities especially those well-informed and and they are aware of supply uh of us running into supply demand deficit contrary to popular belief. So what we're seeing is these utilities are now taking a longerterm vision knowing that their power that their nuclear power will be trading at a premium will be in high demand. These power prices that there is that they're seeing are more than enough so they can make money hand over fist. these utility stocks have done exceptionally well and they're now taking that longerterm vision is what he told me to prepare for a nuclearpowered future. How I translated that was that they will then come into the market to make sure that they secure that nuclear power future via longerterm contracts and also I believe that we will see some form of inventory restocking as well because given global geopolitical turmoil and relatively fragile supply chains, you wouldn't want your multi-billion dollar piece of critical energy infrastructure to have any risk of being there and not providing a 92 and 12% capacity factor. You just don't want that. So they're taking that longerterm view and I thought that was very very interesting. And I also think that one uh the one thing that should be noted is that people are often very focused on okay we need all these fuel buyers to step in because we need replacement rate of contacting right we need 100 to we need 180 to 190 million pounds of contracting happening each and every single year otherwise no bull market that take I don't think is very well informed because there's only finite amount of pounds that can be contracted each year and given that we're running into a massive deficit the the price sensibility of term contracting is going to be u far below the replacement contracting. What I mean by that in plain English is that we are very likely to see price move up substantially on even£100 million or £120 million being contracted on an annual basis. I think that if we get to 100 million pounds, I think we will see the turn price continue to to tick up as it goes. And I've spoken to a few of these obviously spoke to these fuel buyers but also a few producers and fiscal market contexts and basically noted that once we get to the through this 8090 level per pound, uh that's when things get really interesting. That's when the possibility becomes there to hit like an air pocket where those marginal buyers will be chasing the price up. But we first need to get through this $80 to $90 level. How long is that going to take? 6 months maybe, maybe longer, maybe shorter depending on prevailing circumstances in the term market, but it is absolutely going to be interesting. And so which utilities are going to be there and which marginal buyers are going to be there? Well, I spoke to the third fuel buyer because I mentioned two who were very wellprepared and I applaud them for that vision. And I want to say this, these fuel buyers, they are smart, but it's not there is often more often than not not necessarily their job to time the market or to get the best price in the market or to watch the market each and every single day like a lot of these analysts do, especially at smaller utilities. And one of these fuel buyers basically said, "I don't see any reason why I would be paying more than $60 per pound for my supply going forward." At the moment I heard that, I just had to kind of just I was drinking water at the time. I kind of had to keep it in because I just I was just surprised by him saying that. And I believe that uh these are fuel buyers or actually these are the utilities that will be the marginal buyers going forward because I can guarantee you one thing price will be at triple digits before it will get to $60 per pound again on the term pricing. >> Very very interesting to get that perspective and I applaud you for keeping your composure during that conversation. I think a little bit more on on supply. So you mentioned also mining is hard. We all know that and arguably even harder to bring a new deposit into production. But we are seeing efforts in the US elsewhere around the world to speed up permitting just streamline processes a bit. So I'm wondering when you see this happening, how impactful do you think that will ultimately end up being? >> I think in the US in particular, I think it will have an impact. I don't think it will have a massive impact because the US needs approximately 50 million pounds a year in terms of natural uranium demand. And what did we produce it? I think 3 years ago we produced £200,000. The next year 2023 we produced 50 and then last year we produced £680,000. Putting it all together over the past few years, the US has had an annual consumption profile on paper of 150 billion pounds and they produce a grand total of 930,000. That is complete reliance on uranium imports and I think that will change. I think we will see the US ramp up to 510 million pounds getting a few projects online. We've seen a lot of support for it. Do I think they will get anywhere closer to the 43.7 billion pounds in mind at the peak in 1980? Absolutely no way. No way. But I do think there will be more support. I don't think there will be more support in Canada, in Australia, and several other countries to see them get more uranium out of the ground because again, we're going to need a supply response. We're going to need a lot more uranium and we're going to need every pound we can get their we can get our hands on. >> Good to go into that as well. And I'm wondering, so when we're looking at supply, I think we've talked about this before because it's it's something that I think about from time to time. Is there any chance that bottlenecks in the future could dampen enthusiasm around uranium or or nuclear power? How how do you see that? >> I deem that chance as uh very low. Um basically because the cost of running a nuclear power plant if you look at the cost of electricity uh natural uranium is at around I believe 10 to 15% of the total cost that might actually be the complete fuel package not just natural uranium which would be then lower maybe 7 or 8%. Um, with that low of an operating cost, the uranium price would need to go to I heard one figure being quoted as $650 per pound before like it will have like such a big impact on cost of electricity that they will just cause problems. I don't think we get anywhere close to that like anywhere anywhere close to that. So I don't think it will have a major impact on on the uh cost of electricity and the the the procurement profile for utilities if you want to call it that especially if you compare it to something like coal and gas right for coal it's the price of the commodity itself is 40 to 70% of the operating cost for natural gas it can be as high as 80%. So when you look at this, I think that there will be no problems in the procurement of supply because the price will rise as much as it needs to to get enough supply online to meet all this demand because if with all the demand that we're getting and all the positive uh catalyst that we're seeing for nuclear power, they're not going to be allowed to shut down these nuclear power plants. and we're going to see new builds continue to go up as we continue to see accelerating support around the world. So I think the price will rise to make sure we get that demand. I will think we will see that time frame to get that demand and especially um I think a good example of this uh are the hyperscalers. So your Microsofts, your Amazons, your Googles like Microsoft was at the conference. I've heard rumors that they have signed up to the WNA and that Amazon and Microsoft signed up for UX weekly. Um, I don't know if that's actually true, but the fact that this is being discussed, the fact that Microsoft was actually there as part of the WNA, I think says a lot. And I've also heard that these uh these uh hyperscalers, if you want to call them that, these tech giants, they want reliable green 92 and a half% capacity factor nuclear power to power their ever growing data centers and cloud computing stoages and they will not allow for any sort of supply demand imbalance to to stop them getting that power. So what am I hearing is that some of these hyperscalers may enter into the fuel cycle itself to then start procuring pounds. Will we see that? I don't know. But I think the chance is there for them to step into the market for contracts from what I've heard. Instead of that those 8 to 12 years you might normally see over longerterm contracts, 15 to 20 years is something that I've heard being quoted. Again, this is all speculation at this point, but given the folks that they have on nuclear power and given that Microsoft had a nuclear power division was actually at the conference, they are clearly taking a massive interest and that includes the procurement of fuel as well. So basically very long answer but to answer your question in a more concise matter uh no I don't think that price nor timelines nor the supply demand gap will actually stop this nuclear renaissance from continuing continuing to get attraction. >> Very very reassuring. So glad we went into that as well. And I think we've taken a decent look at the supply side but are there any demand side considerations that you would pull out right now? I feel like every time I hear something about demand, it's about how how positive it is and there's there's certainly a lot going on. >> Absolutely. I think for the demand side, I think it's very very good. There were a few downward revisions for like the demand right now. Uh one of the reasons was for uh slightly slower than expected Japanese restarts. Uh some impact from South Korea. Uh the subaricia nuclear power at the large in the entirety of Europe being offline. That all has a negative impact on demand right at this moment. But going forward, it is all right till positive demand risk because right now there is nothing like we're pricing in China of course being a becoming a massive consumer. India be being a growth market for nuclear power. A few nuclear power plants being built here and there mainly in Asia but also some in Europe. What it is not pricing in is a possibility of a major western nuclear buildup program which would be as I called it the catalyst to end all catalyst and is also not necessarily pricing in all these restarts and life extensions but we've seen what I don't think is also or what I don't think is either being priced then especially in the fuel report itself again excellent job W&A with the fuel report but what you're seeing is that if you start accounting for inventory restocking with just discussed that that shifting in US utility mindset to perhaps a longerterm vision rather than a short-term vision. What you're seeing is that they're holding one and a half years to two years worth of inventory. They've always done so and they will continue to do so to make sure that they can adequately get from one refueling to another and not having to worry about okay we have to get everything that we have to get this through the fuel cycle. It's two plus years we don't have any inventory. That will never happen. they will always have inventory because that's just mandated. So basically what you're seeing is that I think for this longerterm vision we could see inventory restocking and them saying maybe we should go for three years maybe we should go for more maybe we should take a leaf out of Japanese utility playbook go for five plus years will that happen I'm not modeling for that but I am definitely seeing that possibility being open more and more I want to say stay conservative in my modeling and model two years worth of inventory when they go ahead and restock but if we see more than that I think we'll have a monumental impact. I also think we might see more strategic reserves. I wouldn't at all be surprised to see the US government go and do the same thing that the Chinese government has done and say, "Okay, we need a strategic reserve because nuclear power is 20% of our grid. It is a absolutely pivotal part of our energy infrastructure. We do not want to be dependent on a foreign nation supplying us to make sure that we can keep the lights on. So as we already established, the US cannot be self-sufficient when it comes to the the supply of natural uranium. So what do you want? You want to build a strategic reserve to make sure that you have a shock absorber in case you need it. So I think strategic reserve building is something we need to take into account. Lastly, financial demand. We've already seen sput have a absolutely massive impact. We've seen uh some other smaller financial players have an impact on the market. I think that we will see financial demand come in more and I think that the moment they enter in uh on mass uh in a more profound way than we've already seen I think is above $90. Once you get through the supply that is still available between 80 and 90 and you get closer to that potential air pocket scenario, I think that is where it gets very very interesting and that's where you get more financial interest in the sector and I think uh depending on the amount of financial interest I think that will have a monumental impact >> right and price was exactly the direction I was going to go in next. So you've talked a little bit about what's going on there. anything further you would say about price expectations in 2025 and beyond. I know you've told us in the past to pay attention to the tour market because that's the reality here, but probably worth talking about the spot market as well. >> Yeah, of course the tour market is the most important market, but I'm not going to sit here and deny that the spot market is not the market that's being watched by most investors and often dictates price movements as well. Uh we already talked about year-to- date term volume demand in case or in the in the instance of spot market demand. We're looking at around 32.5 million bars being contracted over 262 separate transactions on a year-to-ate basis. Um it's not it's it's not huge amount of volume, but it is volume. And I think that we um I think that price will continue to move up steadily. Again, we need to get through this this supply that is available for term contracting between that $80 and $90 level. Um, when do I think we'll reach that $90 level? Could be by the end of the year if a lot of demand comes in. Um, could also be in 6 months, but I believe that over a longerterm time frame. So looking at the end of 2026. So um I think at the end of 2026 I think we are in triple digit uh uranium pricing levels for both spot and term. How high in triple digits? Again that depends on prevailing circumstances. I follow this market each and every single day and I will adapt accordingly but we have higher to go. >> And I think this is a fun question at least for me. So you have your stadium model to essentially tell us where are we in the cycle. So, where would you situate uranium right now at this moment? >> I would say that the um the the brutal correction that we've had, I would I would call that the halftime show. It wasn't much of a show. It was more of halftime torture, but it um it was certainly uh it was certainly a halftime pulse. So, what we're seeing right now is I think we are just about seeing that second half or we we are seeing the second half get on the way. We're seeing more and more people get excited, more and more people slowly and surely entering the stadium. And I think that the second half is going to be the most interesting. And I think that will play out over the coming 1 to 3 years. Again, depending on how this market goes, if we see a spike or if we see a stairst step approach to the upside, I hope we see a stairst step approach. Um, and I think the second half will be the most exciting half. And again, uh to remind people that are maybe not familiar with my stadium model, uh you might want to get out before we go into extra time because even though that is usually the most exciting and as a very good friend and very smart analyst said as well, the thesis will be most compelling at the top. Um you don't want to be there once everything gets so excited and then the game just ends and everybody tries to leave the stadium at once and you're just stuck at the doors. So, um I will keep a close eye on that because again I follow this market every single day. I pour hours and hours and hours of my time into it and my conclusion is we will see a very exciting second half. It remains to be seen how long that will last. Um but yeah, we this game is not over yet. >> Great great context there. And if we look over to the company side, you had posted on X, I believe at the end of August, that the Contrarian Codex portfolio achieved its first 10 baggers. So congratulations on that. And it was the in the form of energy fuels call options. So I thought it would be good to go into that maybe explain the process there and what happened for for those who might not understand or or who want to learn more about the process that you went through there. Now, call options are of course inherently risky for those who are familiar with it. And the remaining call options that we had, we've of course sold a lot on the way up. Like I'm not going to pretend that I'm going to time the top perfectly. But but the remaining copies that we still have in the portfolio are up, I believe today, 1175% in 4 months. Uh which is of course an absolutely insane return that I'm very very happy with. I'm very very happy and that the uh that the codeex community has done very well on those. Um we bought some chemical call options as well. Those went up around 310%. And this is kind of a playbook that I try to repeat when we get like these extremes. So for example, in April and May, I would say we got an extreme low in sentiment. And sentiment is something that I track every single uh newsletter. I upload those every two weeks. And when we track sentiment data from a score from 1 to 100, when sentiment gets extremely low and we get close to a turn and I can uh of course nobody can spot the term or the turn perfectly. But knowing this market inside and outside, it helps when you combine that fundamental analysis with that sentiment analysis to then capture these turns. So those calls have done exceptionally well. Last year the market bottomed at the final day of the WNA. We also bought call options. They also went up 300 plus%. So it can definitely be super profitable. Again, it can be risky. But for energy fuels in particular, my reasoning behind this was not just uranium, but also for those who don't know, I extensively cover in those bi-weekly newsletters also macro analysis. Having a macro playbook I think is very important because it affects all your investments no matter how strong the thesis is. And one of the parts of my macro thesis was that I thought that the negotiations between Russia and China would come down to a few things. And one of those key things would be the export from China of rare earth elements of which they control 90 to 95% of the market. Those rare earth elements are absolutely essential to the US industrial base, especially the US military complex. And those export restrictions that they briefly put on those and those threatening of, oh, then we're just not going to export to you anymore, I thought would really fuel the need and the narrative surrounding a um the need for a domestically secure rare earth element fuel cycle. And White Mesa Mill, which is owned by Energy Fuels, they were busy uh building a separation circuit for those rare earth elements. So they were in prime position to cash in on that narrative. Of course, we're not seeing any government support like yet like we've seen with MP materials, but the narrative itself was enough to drive up the stock. So my analysis there was okay, we're going to see more support for domestic rare element uh production. Energy fuel is going to be one of the main uh main components of that narrative. I think they will do well. they went they ended up doing exceptionally well. They had a few great catalysts over the past week and I think they will continue to deliver. But yeah, that's that was kind of my reasoning and I hope to be able to repeat those uh those call options and those equity positions um when we see the next uh tradable opportunity. >> That gives a really good idea of your strategy there. So looking at your approach to uranium stocks right now, is there anything more about that you can say about how you're focusing? >> Uh I think right now I think it's important to focus on quality like you can go for your small cap exploration place hope they hit the next error deposits and then you can 150x your money. Like that's a dream, right? And that's what everyone wants. And I still think that there is there is some argument to be had to have that exposure. What I would say though, and this I' I think I've noted this in every single interview I've ever done, but it's still relevant, and that is basically um a py pyramid approach. So, you want to build your uranium portfolio to capture the upside that I expect over the coming few years. How do you do that? You build the base of the pyramid, the largest part of the pyramid, um with the highest quality stocks, your camel co, your denense, your nexents, your spots, your sprouts. Um so you have a strong base to capture upside and then as you go up the pyramid you lessen your exposure but you can go up with regards to risks. So basically at the top of the pyramid you might have you might hold one or two smaller positions than some explorers. So you get that torque but your entire portfolio is underpinned by quality names that will still give you exposure even if that explorer doesn't hit and doesn't give you that leverage. I see some people uh building the pyramid upside down, but physics and the market will probably not allow for great returns if you try to do that. So, I try to build myself my pyramid um the way it was intended to by the Egyptians. >> Makes makes a lot of sense. And I think we've done a pretty good job of covering uranium. But before I let you go, as you're mentioning at Contrarian Codeex, you have a much broader view on you've got a macro view, you're looking at other commodities. So before I let you go, I was wondering if you can highlight any other areas where you're seeing opportunity right now. >> I would say right now I think there is a I think macro is right now more important than ever to follow because again it does affect all the investments that we hold. Uh I think it's good to have a good micro macro vision. Um gold and silver even though they have run exceptionally hard and they have been the the carrier even though uranium has done so well and the college hasn't done well gold and silver have been the carrier in the uranium or in sorry in the gold silver portfolio and that's where we recently got another 10 backer for one of our holdings adding precious metals so that was also great to see uh but even though those have done exceptionally well and even though uh we have a an outsized exposure to it I still think that there is more upside left for especially gold. Silver is gold's uh volatile little cousin if you want to call it that. And uh it will go it will go up a lot, it will go down a lot, it will be volatile. But gold itself is um to kind of tie it into my my macro road map is what we have seen over the past two years. We've seen two three years actually. We've seen gold slowly but surely come back into the fold as a neutral reserve asset of sorts and we're seeing it slowly but surely start to take market share uh from US treasuries as that uh global neutral reserve asset and I think this is a trend that will just continue to take place and that will keep pushing gold higher and higher and higher until the broad market finally realizes that oh oh yeah this gold this rally speculative. Oh, it's because of all the geopolitical turmoil. Sure, there's a little bit of that. There's always a little bit of that. But overall, I would say that this rally is underpinned by a real fundamental move in the global monetary system that I don't think is anywhere near over. So, I think that there is still opportunity there. Uh, I really like copper. Um, we've done well on US cannabis, but also very volatile. Tin is also very interesting and beyond that I I really really like and that is some of my highest conviction stocks today US industrials and that's not just uh US industrials just in one particular bracket it's it's more broad than that and I think that several US industrials are are very very interesting right now once you get into that theme of US reindustrialization and reshoring and yeah we have a few of those in the portfolio and I think those will do uh will do very very well. >> Good to go into that as well. And very final thing, where can everybody find you if they want to learn more and read all of your research? >> Oh, people can find me at yellow1 on Twitter. They can go to patreon.com/contringcodex for bi-weekly newsletters, company analysis, uh frequent updates either on macro or uranium or anything other that affects the portfolio. Um and for interviews as well. I also run a a discord community uh where a lot of great ideas are shared and I am very thankful to have such a great community and there are so many super smart members part of it that just share their own insights and it's just it just makes for a great way to navigate the market. So, uh I hope to see people there. >> Well, very good. Well, we'll have links in the video description for people if they want to learn more. Thank you so much for coming back to talk about what's going on in the markets. This was very valuable for me as always. >> Thank you for having me, Charlotte, and I hope the listeners enjoy it. >> Of course, and once again, I'm Charlotte Mloud with investingnews.com and this is Mark Walbert with Contrarian Codeex. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]